Pay Dirt is Slate’s money advice column. Have a question? Send it to Lillian, Athena, and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
My boyfriend, Z, and I have been together for about four years and are planning to get engaged and start a family soon. He makes me incredibly happy and we share many similar values, but we differ on one thing: tipping. Z grew up in a country where tipping is not expected (and can be insulting). When Z moved here, he worked several low-paying service jobs and was rarely tipped in any of them. As such, he sees tipping as optional and rarely gives more than 5 percent, even at nice sit-down restaurants where one would generally expect to give 15-20 percent. I have tried to explain the tipping culture in the states many times and to make me happy he will tip 15 percent if I ask, but I can tell he thinks it’s wasting money and doesn’t tip when we’re not together. We both make good money, and I’m very uncomfortable with the idea of denying someone a tip they may have been relying on when we can afford to tip generously. Is there another way to approach this conversation with him?
Dear Big Spender,
American tipping culture is due for a complete overhaul. Tipping justifies businesses underpaying workers, it makes servers more vulnerable to sexual harassment, and is discriminatory. Which service positions receive good tips is arbitrary; I made a pittance in tips as a barista and $10 per hour as part of the tip pool as a dishwasher at a fancy restaurant.
Every culture handles tipping differently, but it might work to frame tipping not as cultural practice in the U.S., but as part of our economic system, like taxes. Because of our special American tipped minimum wage, it is an expected part of the cost of service. I might be miffed to pay 25 percent VAT when I eat at a restaurant in Copenhagen, but I don’t get to skip out just because I’m an American. Until we reform the tipped minimum wage, tipping is just a part of living in this country and will help him “save face.” It might help to appeal to his experiences as a low-wage worker without good tips. Not tipping at a sit-down restaurant is akin to paying the restaurant owner but none of the workers.
Ask your boyfriend to experiment with tipping generously for a short period, just to see how it feels. Rather than “wasting money,” tipping feels good to me—it is giving money directly to hard-working individuals. Certainly feels like less of a waste than providing a tacked-on service fee to a huge corporation.
Dear Pay Dirt,
I’m in my late 30s, rent a stupidly affordable place in a town where rents are skyrocketing. A close family member died today and I’m likely going to inherit his house in my town. I’m one of those people who needs to focus on planning and the next steps to get through tragedy, so I hope I don’t sound callous by asking these questions.
I’m getting the house because I promised to take care of his beloved pets. I’d hoped that would be an idle promise for a long time to come, but here we are. The pets have wrecked the house. Our city condemned it after the body was removed. It was a fairly nice, middle-class home in a decent, but not fantastic part of town, probably worth around $150,000, but who knows with the current housing market. I’ll need to remove urine and feces, replace sheetrock that has been damaged by the same, replace a section of the ceiling, remove a bee hive (!), and who knows what else before the place is habitable. I have some companies coming out to do free estimates on what that would take, but I’m guessing it will be around $30,000 at a minimum.
I’m lucky to have four digits in my savings account at any given time. The mortgage would be less than my rent, and I did grow up with parents who are landlords, so I have experience renting places and the work that goes into that. My family would probably be able to help me with upfront costs, though that’s not ideal. I have so many questions: What is the equity in the home? Would home insurance cover the cost of some of the repairs? Would it be wise to ask for a personal loan from my credit union? Is this worth taking on? It seems like walking away from a property over a fraction of the value in repairs would be silly. Obviously, I’m going to take care of the critters, but I can’t bring them into my home.
As an old millennial, I’m not going to have another chance at home ownership until my parents pass away, and I’m hoping that will be a very long time from now. Should I take this on? If not, what should I do? I’m at a total loss. I’d like to get this figured out so I can mourn.
—Please Don’t Judge Me
No judgment here. I’m the kind of person who makes backup plans for my backup plans. The person who holds the answers to many of your questions is the executor of the estate. They will know how much equity is in the home and if there are any liens against the property. Do your own search on your state property liens database. Part of the executor’s job is to determine if the estate has enough income (such as life insurance proceeds) to pay off any outstanding debts. Your late family member may have made other provisions for the pets in their will, such as setting aside money for their care.
Once you know how much equity is in the home, you need to get details on the notice of condemnation from the city. This usually goes to the property owner but will transfer to their estate upon death. The notice will detail what repairs need to be done to remedy the condemnation notice and their deadlines. This will help you determine what work to get estimates for to make the house inhabitable and stop the city from reclaiming the property. I’d recommend also getting an independent appraisal and inspection.
After you have estimated the cost of repairs and determined the equity and debt, you’ll be able to decide whether to keep the home, sell it, or disclaim the inheritance.
Usually, condemned properties cannot be sold as a home but can be sold at a discount for the value of the land underneath. You could sell the property to a buyer with the money to do the remedial work or remove the structure. As long as the land is worth more than what is owed on the home, you would come out ahead. This would allow you to use the proceeds from the sale to rent or purchase a place that will enable you to take care of your loved one’s pets.
If you would rather keep the home, you’ll need to figure out financing for the repairs. I would never advise someone without an emergency fund to take on a project house because 1,000 unexpected problems come with homeownership. Your savings are on the lower end so it makes me think you aren’t yet financially prepared to tackle this. But sometimes, having a big project can help as you work through grief. Maybe this unexpected inheritance is the swift kick you need to embrace new financial habits.
You are unlikely to qualify for a home equity line of credit on a condemned home. While it is essential to ensure the homeowner’s insurance continues to be paid, such insurance policies rarely cover pet damage or beehive removal. If your parents are willing and able to loan you the money upfront, this is your best option. Your parents are likely to offer you a better interest rate than you would get on a personal loan from a credit union.
Your final option would be to disclaim the inheritance. You might want to do this if you discover it has more debt than it is worth or the cost of repairs outstrips the home’s value. In that case, what to do with the critters is a separate issue from the house.
Dear Pay Dirt,
I work part-time and my salary is deposited into the account that pays off my credit card bill at the end of each month. I never spend more than I make so there is always some money left over. I also have a side gig and the money from that goes into a separate savings account that I never touch.
My husband makes about eight times more and on his salary alone we can afford a very comfortable living without having to track our spending or overthink our purchases. We have health insurance and a pension plan through his employer. He basically has job security for life, and his company pays our rent as part of a relocation package, so we don’t have a mortgage. We also don’t have a car or any other debt. Basically, things are fine. The main issue is that because we are so comfortable with his salary alone, I am too lax with money. I don’t have super expensive tastes, but I also don’t mind splurging on nice stuff occasionally or buying things that are not absolutely essential. We just had a baby and while things are pretty comfortable for now, I would like to develop some more discipline around finances. Where do I even begin?
—Loose Purse Strings
Dear Loose Purse Strings,
Being in a stable financial position with a new baby is a great opportunity to start building a financial plan. The goal of a budget isn’t to make you suffer, but to get the best value out of your money.
I recommend tracking everything you spend on paper for one week. Rather than reactively looking backward at your credit card statement, carrying around paper and pen is proactive. This helps you build some intentional practices around your money. Carry a notebook (or print out this template and slide it into your wallet) and write down everything as you go about your week spending normally. Treat it like a fact-finding mission: You’re gathering data on when, where, and how you spend your money. At the end of the week, reflect back on each purchase—did you feel good, bad, or neutral about it? Mark each one with a smiley face based on your answers. You may find you made some impulsive purchases you regret or simply bought items you didn’t get value from.
One week might not sound like a lot, but the goal is to shake up your routine and get a better idea of how you spend. You can turn your weekly tracking into a rough monthly budget by categorizing your spending for the week and multiplying them by four. Then add in any missing monthly bills and savings. Voila, rough monthly budget! Adjust as you go, and make room for some occasional splurges.
Once you have a grasp on how you spend, sit down with your husband for a “money summit.” Focus on your shared values and how your income can facilitate them. Talk about the experiences you want from life that require money. That might be education for your kid, vacations or trips to see family, cultural traditions, charitable giving, or retiring to a different city. Try making this an annual event. Even though your husband has a company pension, consider a Spousal IRA or Roth IRA for yourself to ensure each of you has a nest egg for retirement.
Also, make sure some of that money you’re saving is going into a separate account (not a joint one). Finances are often cited as the biggest barrier to leaving an abusive relationship. This is even more important if you rely primarily on your partner’s job for your housing and health insurance. Saving a chunk of your part-time income into an account that is only accessible to you is just a backup plan. Hopefully, you will never have to use it.
Dear Pay Dirt,
I worked in an industry with a strict hierarchy and power dynamics that foster abuse. Everyone who sticks it out trauma bonds. You stick it out long enough to make enough money to make all the sacrifices feel “worth it.”
After time away, I am returning to a more equitable position. Before I left, I was deep in the “do whatever it takes” mindset that fuels the industry and widespread abuse within the industry. I was working on an obnoxiously stressful project. During this project, I personally paid for several invoices for my boss as well as other personal charges (I could not use their credit card for in-person transactions). The total is roughly $1,400. This is a lot of money to me, but not a lot of money to them. I don’t want to use the money for anything. I’m a saver and miss having that number beef up my now pitiful savings account, which took a BIG hit after being out of work from the health-related mishaps incurred while on the aforementioned catastrophe project.
My former boss and I are on decent terms now, after being on rocky terms. The rocky terms started, of course, when I left the project for my physical and mental health when they “needed me” the most. They still hold a grudge that I left and hope that I will one day come back. The wildness of this industry is that I often have to make ambitious personal choices that poop on my mental health. This means keeping a doggy door open to bad bosses and abusers who can actually put in the one call/email to help me get what I want long-term.
In my ex-boss’s slight defense, they were NOT aware I made these purchases directly from my account on their behalf. All of this said, do I send my ex-boss a nice email and an invoice for the personal nonsense I purchased on their behalf? Or, do I just let it go and let the $1,400 hole in my savings account fester?
Dear Uncle Fester,
There is a whole lot to unpack here. Are you sure you want to keep working in this industry? You asked a relatively simple question but added several paragraphs about how terrible the work is: gatekeeping abusers, stress-related health crises, catastrophic projects, grudge-holding bosses, and co-worker trauma bonding. Reading between the lines, it appears you’re actually looking for someone to tell you it’s OK to change industries to something that doesn’t make you miserable.
I’ve painted a vivid mental picture. Obviously, you work under Miranda Priestly in The Devil Wears Prada universe. Your boss had you buy her $1,400 worth of designer Hermès scarves to use as tissues. But at least in The Devil Wears Prada, people suffer through the downsides because they want to do creative work with high-end fashion. You didn’t mention a single positive aspect of your industry. Of course, there are downsides to every job and issues in every sector. But it sounds like the bad vastly outweighs the good for you.
You said that colleagues stick it out working in the industry until it is “worth it.” It is human nature to not want to give up once we’ve invested time and money because of Sunk Cost Fallacy. Each extra year of your life you spend in this industry, the harder it becomes to leave because you don’t want to “waste” your investment. But you cannot get that time back; it is a “sunk cost.” Time is our most finite resource. Why invest yours in such a toxic industry? A better investment would be investigating a career change to a position with more healthy working conditions.
On the question of invoicing your boss: You were not clear on how much time has passed. It will be more awkward to ask if it has been more than a year than if only a few weeks have passed. If your ex-boss can lose track of $1,400, hopefully, it won’t be a burden for them to repay you promptly. In the future, if you absolutely can’t avoid buying something on your personal card for your boss, make sure to submit a reimbursement promptly. Don’t wait until you’ve left the project.
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My husband and I are not particularly well-off, but we are incredibly proud of our daughter, who has worked her butt off and gotten into our (excellent) state school as well as a handful of prestigious private colleges. She wants to go to one of the latter, and apart from a small amount of need-based financial aid, she’s looking at taking on a lot of student loan debt. The rest of the family thinks we should help pay for part of it by cashing out our 401(k).